institutional mechanism design

"How do we transform the communist economy into modern market-based economy?," the Chairman asked. ...

Within the last decade, international accounting, as a common language of business and a mode of governance, has come to be widely disseminated in China, and has become an indispensable infrastructure of its socio-economy. This diffusion of accounting was propagated as a national strategy for growth, led by a few senior officials as key actors, and implemented through the National Accounting Institutes (NAIs) as a distinct institutional mechanism. Despite its importance, accounting is rarely examined in the literature of knowledge transfer, institutional sociology, transitional economics and development studies. Drawing on the multidisciplinary methods of contemporary history, this paper casts light on the NAIs as a focal point which effectively transfers and disseminates new knowledge, order and the spirit of a market economy, and which could be further developed, with cautions, as a replicable model for transitional and developing economies.

There is no intrinsic shape with our economy. The macroeconomy does not carry any numbers such as GDP. It does not have any period of accounting, such as one year, or a quarter. It of course does not balance in any sense in the real economy. But we know our economy with numbers in a fixed period and in the balanced format as if it is an entity that we can control. It is “accounting” which has given our economy a formal profile and manageability since the 1930s. Keynes employed his junior colleague, Richard Stone, who applied accounting concepts to our economy so that the Government can control our economy. Drawing upon the primary archives, this paper analyses the history and process in which our macroeconomy came to be shaped by accounting.

Within the last decade, international accounting, as a common language of business and a mode of governance, has come to be widely disseminated in China, and has become an indispensable infrastructure of its socio-economy. This diffusion of accounting was propagated as a national strategy for growth, led by a few senior officials as key actors, and implemented through the National Accounting Institutes (NAIs) as a distinct institutional mechanism. Despite its importance, accounting is rarely examined in the literatures of knowledge transfer, institutional sociology, transitional economics and development studies. Drawing on the multidisciplinary methods of contemporary history, this paper casts light on the NAIs as a focal point which effectively transfers and disseminates new knowledge, order and the spirit of a market economy, and which could be further developed, with cautions, as a replicable model for transitional and developing economies.